What is the average cost to set up an LLC?
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The average cost to set up an LLC is $127. This is the one-time filing fee that creates the LLC by state law.
The map, chart, and table below show the LLC filing costs in all 50 states, plus Washington DC.
The cheapest state to start an LLC in is Kentucky, with a $40 filing fee. The most expensive state to form an LLC in is Massachusetts, with a $500 filing fee.
Illinois used to have a $500 filing fee as well, but effective December 20th, 2017, the Illinois Secretary of State brought the filing fee down to $150, in order to be more in line with the national average.
There are eleven states with a $100 filing fee and ten states with a $50 filing fee.
Note: These numbers don’t include additional LLC fees, such as LLC Annual Fees and registered agent fees (if needed). More on those additional LLC costs below.
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)
Cost to set up an LLC:
[table id=20 /]Where Should I Form a LLC?
A lot of readers see the chart above and think they should form an LLC in a different state in order to save money.
Think again.
Forming your LLC outside of your home state (or the state where you are doing business) will end up costing you far more in the long-run.
For example, if you live and do business in California, but form an LLC in Wyoming, the state of California will require you to register your Wyoming LLC in the state of California. This is called a “Foreign LLC Registration”.
The means you now have to pay 2 state filing fees, 2 state annual report fees, and maintain a Registered Agent in Wyoming (where you don’t have an actual physical presence).
Worse, you won’t save any money on taxes because taxes are paid where the money is made, meaning you’ll still end up paying California taxes anyway.
To learn more about Domestic LLCs, Foreign LLCs, and where you should start your LLC, please read this article: best state to start an LLC.
There are a few exceptions to this rule:
• Legally doing business: If you are legally doing business in a state besides your home state, then you should form your LLC there. For example, if you live in Ohio, but own restaurants in Pennsylvania, then you should form your LLC(s) in Pennsylvania.
• Real estate: If you are going to own or lease property in another state, then that is where you should form your LLC, since that is where you are legally doing business.
• Foreigners: Since non-US residents and non-US citizens don’t have US residency requirements, they can pick any state. If you are a foreigner and are doing business in the US, it’s best to form the LLC in the state where most of the business transactions take place, or the state where you visit most often. If you’re business is 100% digital and you don’t have any US presence, Delaware and Wyoming are two popular choices. Another thing to keep in mind is the price of your flight to come to the US and open a bank account after your LLC is formed.
A a note for US-residents and US-citizens who work online: Even if you “work online”, you are working from somewhere, which is most of the time your home… so that is the best state to form an LLC in. If you are really nomadic and don’t have a home state, pick the state that was your home state, the state where you pay taxes, or the state where you have family and friends.
LLC Registered Agent Fees
You need to list a Registered Agent on your LLC filing form in nearly all states (except for New York and West Virginia).
A Registered Agent is a person or company who agrees to accept Service of Process (legal and court mail) in the event your LLC is sued.
If you or someone you know has an address in the state where you are forming your LLC, then you/they can serve as your LLC’s Registered Agent (and this will save you money).
If you don’t have an address in the state where you’re starting an LLC, or you prefer to hire a professional, you can use the services of a Commercial Registered Agent.
Although Commercial Registered Agent fees can be as high as $360 per year, the two companies that we recommend only charge $99 per year and $125 per year.
Initial LLC Filing Requirements
The LLC fees above are just the filing costs.
Many states have Initial Filing Requirements, which are usually due within 1-6 months after the LLC is created (in addition to ongoing Annual Report requirements.)
Here are a few examples:
• For California LLCs, you must file a Statement of Information ($20) within 90 days of your LLC being created.
• For New York LLCs, you must file newspaper ads (fees range from $100 to $1,200) in two papers and file a Certificate of Publication within 120 days of your LLC being formed.
• For Alaska LLCs, you must obtain a State Business License after your LLC is formed, but before you conduct any business.
Those are just a few examples. Not all states have Initial Filing Requirements, but many states do.
For more details on your state’s LLC set up and filing costs, see our free step-by-step LLC guides.
What about trucking and shipping companies that transport goods to many states. Could an LLC operate out of one state and service many without encumbering taxes across many states? Basically I’m asking if there is an advantage to one state over another when transporting across state lines with drivers living in more than one state? Is there an advantage to picking a specific state as the base of operations to work out of and distribute loads?
Hey John, apologies it took me a while to get to your reply. I’d say unless you’re actually going to have a REAL physical presence in a particular state (like an actual office, staff, real business, etc.), there could be more risks to going outside of your home state. I’d ask yourself:
Where do you reside?
Where do you pay state taxes?
Where do you receive your income? Where are payments mailed and/or in what state was your bank setup?
What state is you vehicle tagged/registered in?
Where do you return to between hauls?
And to answer your question about taxes, generally no. If you haul through certain states often you usually have reporting and filing requirements in that state. An accountant familiar with the logistics industry should be able to help you identify where and what you need to file. Most people in your industry form their LLC in their home state; the state where they reside. People have run into issues when they go out of state, but aren’t actually doing business there. Things like some owner-operators being audited by DOT/FMCSA compliance officers at their place of business, as well as “office” (whether an actual office or home) inspections done by state DMV compliance officers. There have also been known cases of states going after revenue (and imposing penalties and fines) on residents who form their LLCs out of state. Hope that helps!
Hi Matt,
I live in NJ but own rental apartments in TN. I wanted to create individual LLCs for each unit.
Do I to open up individual LLCs for each apartment in TN or can I register them in NJ?
Hi Jay, since you’re doing business in Tennessee, the LLCs that own the properties need to either be formed as Domestic LLCs in TN or registered as Foreign LLCs in TN (this is where the LLC is formed in NJ but registered to do business in TN). Another options is to form the LLCs in TN but instead of you owning them personally, they are owned by a parent LLC, say formed in NJ. Some investors form the parent company in Wyoming for better asset protection. And something else to consider is a Series LLC in TN. This will reduce the formation costs and still offer asset protection. However, Series LLCs are relatively new and tax law and liability cases are still evolving. With all those options, we strongly recommend speaking with a few real estate attorneys about how to best structure your setup. And here’s a related article: Domestic LLC vs Foreign LLC. Hope that helps.
I am starting an LLC with someone from Idaho. I live in Texas. The business will essentially have 2 physical addresses, 1 in each state. To make things more complicated, we will be bidding on government call-when-needed contracts that could order our assets for temporary work in any state. Would it be appropriate to simply set up the LLC in Idaho?
Hi Derrick, sounds like you’ll be doing business in both states. In that case, you may want to consider forming a domestic LLC in Texas ($300) and then registering as a foreign LLC in Idaho ($100). If you were to go the other way around and form a domestic LLC in Idaho ($100), the foreign registration in Texas is $750. Hope that helps save you some money.